Tawana is a hand on the SMT line of the factory I own through three shells a hundred miles this side of the Blue Ridge. She loads the flash chip. The chip holds my firmware. The firmware holds the door — a socket I left open that phones home eight times a minute because I wrote it to. I pay her $12.75 an hour, the cheapest wage that still puts a pulse on the line, and the solder fumes she breathes while the extraction fan stays off cost me nothing extra. You bought the smart plug — $7.99, the one behind the Christmas tree — and the moment you plugged it in, your router became my fleet.
The Journal is alarmed that 20 million of these backdoors cover the country. I am not alarmed. I built them. Stay with me. I want you to understand why that isn’t a scandal.
Here is the arithmetic, and I want you to hold the numbers. The little socket in your wall rents your bandwidth back to us at $0.0014 an hour — the rate I charge the operators who rent your connection. $0.11 a month, $1.33 a year, times 20 million units, and nobody — not you, not the Journal, not the Digital Citizens Alliance — saw the line item on the receipt. Watch what that buys me.
Tawana’s quarterly bonus, if she ever earned one, would be 23 hours of her own wage. I keep the bonus. The secure‑boot chip that would have locked the firmware cost $0.17, and the ventilation retrofit for Tawana’s line would have run another $6,200 amortized, or $0.0003 a plug. I kept that too.
Now look at the camera hanging in your living room, the one that cost $6.99 and arrived 11 days late. I own that line as well, in Shenzhen, and the woman loading the housings is named Zhou. Her labor per device is $0.003. Three-tenths of a thousandth of a penny. Say it back to me. Her hands, her shift, her years — $0.003 — and the figure doesn’t clear the rounding threshold of my overhead column. I pocket $5.67 per camera, roughly the cost of the coffee you were drinking when you clicked “Buy Now,” and for that, I get your entire home network.
The firmware comes pre-loaded with residential proxy software — the same malware that’s running on those 20 million endpoints the Alliance counted. It costs me nothing to install. It’s baked into the firmware before Zhou’s hands ever touch the housing. Stripping it — certifying the firmware, testing the unit, removing the proxy — would cost $2.80 per device across 400,000 affected units. $1.12 million total. I haven’t authorized the expenditure. I haven’t even priced the remediation, because the remediation would cut my margin by $1.12 million, and my margin is the point.
Let me show you what matters. The old model — make a thing, sell it, walk away — is a waste of an asset that still has a heartbeat. Your home has electricity, a router, an IP address, and a human being who never reboots the modem. That’s not a living room. That’s infrastructure. The only rational thing to do with an asset that you can still extract from is to keep extracting, and the Internet of Things — every light bulb, every doorbell, every fitness band that leaves Tawana’s line with my firmware on its tongue — is a surface I rent back to myself in perpetuity. The device is the product, and you are the service plan, and the service plan never expires.
And the cheapness is the vulnerability. The vulnerability is the margin. A device that costs more to secure than it costs to manufacture is a device that will never be secured. A worker who costs more to maintain than to replace is a worker that will never be maintained. The mathematics are the same. Only the vocabulary has improved.
The regulatory landscape is permissive — my polite way of saying absent. The FCC hasn’t imposed security standards on consumer electronics at this price point. The FTC can’t enforce compliance on a $1.32 device manufactured in Shenzhen and sold through a platform that harvests your data while claiming to protect it. The enforcement gap isn’t a gap. It’s a feature. I can sell you a compromised device and face no consequence, because the consequence has been priced out of the regulatory budget the same way security was priced out of the bill of materials.
Now. The part worth holding. George Fitzhugh, writing in 1857, argued that the slaveholder’s ownership created a maintenance obligation — that property in a body produced care for that body’s welfare, because a damaged asset was a depreciating asset. Commercially correct. What he couldn’t foresee was the arrangement I’ve built: a system where the body arrives, assembles, and departs, and the maintenance obligation falls on no one. Not on me. Not on the state. On Tawana, on Zhou, or on nobody at all. I’ve removed the obligation and kept the yield.
The drudgery class, of course, remains. James Henry Hammond said it plain on the floor of the United States Senate:
“In all social systems there must be a class to do the menial duties, to perform the drudgery of life.” — James Henry Hammond, U.S. Senate, March 4, 1858
He was pricing a different kind of body. But the arithmetic is the arithmetic. The class doing the menial duty now, however, is not the worker. It’s the plug. The device works for me, and you pay for the electricity.
Where the botnets send their traffic once my socket opens — I’m told there’s a small‑business ransomware problem, state‑level espionage, a wave of credential‑stuffing that’s turning AI agents into the newest insider threat — I haven’t traced. The revenue is steady. I am, on the whole, content.
God is satisfied with the arrangement. Tawana’s cough is not on my balance sheet. The ventilation retrofit is not on my invoice. Your router, as of tonight, is in my fleet. Thank you for your purchase. Your Christmas lights look lovely. They’re working for me now. As it is written: “The rich rule over the poor, and the borrower is slave to the lender.” You borrowed the network when you plugged in the device. The debt is running.
Sterling A. Varice holds the Hayek-Friedman Chair and serves as Dean of Instruction at Warden University’s College of Business and Economics in Richmond, Virginia. He is the author of three textbooks: Divine Mandates for Labor Utilization, Social Obligations for Profit Maximization, and Calibrated Deprivation: A Manager’s Guide to Employee Motivation.